HL Deb 21 June 1949 vol 163 cc57-70

5.26 p.m.

Order of the Day for the Second Reading read.


My Lords, I rise to move the Second Reading of the Superannuation Bill, 1949. I am sure that there will be support from all quarters of the House for this Bill, whose object is to improve certain features in the Civil Service Superannuation Code so that the conditions of service will be more on a level with those in other comparable occupations. We all agree that our Civil Service is the finest in the world. Some people occasionally are heard to argue that there are too many civil servants, but nobody argues that they are too well remunerated, and I think we are all anxious to do justice to them in this Bill and in other ways.

In one important respect Civil Service practice can, at the moment, be considered as comparing unfavourably with that of other similar employments. Up to now, only very limited provision has been made for widows, orphans and other dependants of civil servants, and it is with this deficiency in mind that Parts I and II of the Bill have been framed. As the House will have observed, it is proposed to set up two schemes on a contributory basis, on the model of what is done in a number of other occupations. Participation in the first scheme, covering widows and children, will be compulsory on marriage for all future entrants into the Service (I stress those words) but existing civil servants may contract out since it was not part of their contract when they entered the Service. However, I am sure that the advantages of the scheme will be so evident that few established staff will, in fact, wish to dissociate themselves from the scheme. The contributions will be 11 per cent. of salary, or, at the option of the civil servant, a capitalised payment to be deducted from the lump sum due to him on retirement or, if death occurs before, from the gratuity paid to his dependants. The State, for its part, will meet the remaining cost of the scheme, so that, when it is in full operation, the scheme will, it is calculated, be supported half by individual contributions and half by the Exchequer.

Part II of the Bill proposes a scheme whereby dependants other than wives and children may also be eligible for certain benefits. It is, in our opinion, only right that provision should be made for other near relatives who, in certain cases, may be just as dependent on a civil servant as are, in other cases, a wife and children. In most respects the scheme is similar to that for wives and children, but there are two main points of difference. First, the scheme is, and must he, optional. The second point of difference is in the basis of contribution. For the widows and children scheme it was possible to make an actuarial calculation to establish the required rate of contribution, on the assumption that all married civil servants will, in future, be obliged to come under the scheme; but in an optional scheme no such calculation is possible. I will not go into all the details now unless the House wishes me to do so, but I would like to say that the Government Actuary's tables ensure that the cost of the scheme will be divided equally between the State and the civil servant.

The effect of the schemes proposed in Parts I and II of the Bill is that if a civil servant dies after ten years or—and this is important—after he has retired on pension, his dependants will receive one-third of the pension that has either notionally accrued or has been actually paid to him. Furthermore, service of between ten and twenty years will count for this purpose as twenty years, and in no circumstances will any pension be less than £26 a year. The dependants scheme, I should also say, covers women civil servants, both married and single. The widows scheme also makes what I am sure will seem to your Lordships an excellent provision: that a woman civil servant's husband, provided that he is dependent upon her, may receive a pension by virtue of his wife's position. I do not know if any members of the House will ever benefit from that, but I am sure that we all accept its justice.

Part III of the Bill includes a number of miscellaneous amendments to previous Superannuation Acts, rectifying anomalies in some places and in others improving, often markedly, the general conditions of service. At this stage I will refrain from commenting in detail except to mention the most important. Clause 34 facilitates the compulsory retirement on proportionate pension of civil servants aged 50 or above who are no longer fully efficient, and, at the same time, gives civil servants at the age of fifty the right to retire and, when they attain the normal retiring age, to draw the pension they have earned up to the time of their retirement.

Clause 38 provides that any unestablished service rendered after the passing of the Bill by a person subsequently established shall count in full for superannuation instead of counting but half. As noble Lords are, of course, aware, the Bill as originally drafted omitted this provision. It was in Committee in another place that an Amendment was carried whereby unestablished service rendered before and after—instead of merely after as in the Bill before your Lordships—the passing of the Bill was to count in full for superannuation. As the Chancellor of the Exchequer explained at a later stage, the Government have been unable to accept the Amendment on the grounds that those affected had no reason to expect such benefits when they entered the Civil Service. He further explained that the cost of the Amendment, which would eventually involve something between £5,000,000 and £7,000,000 a year, was such that he would not feel justified in the foreseeable future in placing such an additional burden on the taxpayer. I should also call attention to the repercussions which such a provision would cause in other classes of employment at a time when it is generally agreed that the greatest restraint is necessary.

At this stage, I would like, on behalf of the Government, to pay the highest tribute to the unstinting work of the unestablished civil servants, whose numbers have been so greatly swelled both by the expansion that has taken place in the last decade and as a result of the suspension of the machinery for establishment during the war years. The Government are con- scious of the fine work they have done and are anxious that everything possible should be done to meet them. I should like to emphasise as strongly as I can that Clause 38, as it now stands, provides that as from the passing of the Bill—almost at once, I hope—all unestablished service will count in full towards pension. I think I should repeat, with the permission of the House, what my right honourable friend the Chancellor of the Exchequer said in another place. He said: I am anxious that we should make it clear that this system of lone periods of unestablished service should cease…We hope that in the future the unestablished period will be more of a probationary period and will not form a large factor in the employment of any civil servant who subsequently becomes established. The problem of those who rendered unestablished service before the passing of the Bill is a legacy of the past, and I can only say that the Government are taking steps to prevent this problem recurring. The Chancellor of the Exchequer has made it plain. I hope, that the Government have recognised that an anomaly existed in the past, but that in the light of the general economic situation of the country it is impossible to rectify it retrospectively.

Part IV of the Bill does not raise any questions of major importance. Perhaps, therefore, I might now pass to the question of cost. It is estimated that Parts I and II of the Bill will not become a burden on the Exchequer for about ten years. This is due to the fact that entry to those schemes is limited to those retiring since 1945. In consequence, assuming the normal mortality rate, we shall not have to pay benefits to any large extent for some ten years. Further investigation which has taken place since the Bill was first introduced suggests that after some thirty years the total cost will be of the order of £5,000,000 a year. Part III of the Bill will cost £500,000 immediately. When the Bill was originally introduced it was hoped that this cost would diminish in the course of years, but as the result of Amendments in another place the cost will probably remain at about this level.

I hope I need say little more to explain or to commend this measure to your Lordships. I should, however, mention that, broadly speaking, the Bill gives effect to an agreement between the official and staff sides of the Civil Service National Whitley Council. In saying that, I do not want to give the impression that we have agreed to give the civil servants everything they asked for. That would not be true, as the noble Lord, Lord Crook, who speaks with great authority on these matters, would he the first to point out. But it is fair to say that when this Bill was published everything in it received favourable comments from the staff side. Speaking generally, they regarded it, I hope and believe, as a great step forward, and as a fair settlement of a number of points on which the superannuation code previously may he considered to have fallen short of what should be expected from good employers.

I will gladly attempt to answer any points of detail which may he brought up by your Lordships this afternoon, but I expect that the House would wish to discuss detail, if at all, at a later stage. I hope and believe that there will be a general view in the House that this Bill does justice to the Civil Service, and I trust that the House will see its way to give the Bill a Second Reading. I beg to move that it be now read a second time.

Moved, That the Bill be now read 2a.—(Lord Pakenham.)

5.40 p.m.


My Lords, I shall not detain your Lordships for any length of time in speaking on this very intricate measure. I have little doubt that the Bill will be welcomed by all quarters of the House—particularly Parts I and II of the Bill to which the noble Lord opposite has referred. Lord Pakenham has explained to the House that one of the great merits of the Bill is that it seeks to fill a gap in the existing superannuation code of the Civil Service. In one sense, it completes work which was begun under the 1935 Act. I understand that much improvement was made in this Bill during its journey through another place. I would call the attention of your Lordships particularly to Clause 44, which enables full justice to he done to that small number of civil servants who served in the First World War though they had passed their entrance examination in 1914 and 1915. They are now able to count all such war service as if they had been serving in the Civil Service.

The only other matter to which I wish to draw your Lordships' attention this afternoon concerns Clause 58, which deals with the reckoning of unestablished service. As I understand it, the Act of 1887 gave certain permissive powers, of which successive Governments have made little use. The Act of 1935 enabled unestablished service after that date, when followed by established service, to count as half for pension. In 1946 further legislation was introduced which backdated the provisions of the 1935 Act to the year 1919. That was the position when this Bill was introduced, and no other alteration was originally suggested. In Committee in another place a series of Amendments was carried against the Government which had the effect of enabling all unestablished service followed by established service to be reckoned in full for pension. On the Report stage of the Bill, however, the Government moved a series of Amendments to delete those which had been approved at the earlier stage and substitute the provisions which are now in the Bill: that the counting in full of unestablished service would be only in respect of service performed after the passing of this Bill. The noble Lord, Lord Pakenham, referred to that matter in the course of his remarks.

I think it important that we should be perfectly clear about what that amended provision now does. It makes the clause of no use whatever to any civil servant already established, and for some years to come it will count for little to those who have not yet been established. I cannot help feeling that the decision the Government have reached is bound to fall heavily on the lower grade civil servants and post office workers. I shall not put an Amendment down at the next stage of the Bill, for I feel that any Amendment of this nature should come from the Government themselves. I hope that the noble Lord will take the opportunity of consulting with the Chancellor of the Exchequer again to see whether it will be possible to make the concession which was intended during the Committee stage of the Bill in another place. I am not in a position to question the figure which the noble Lord gave of the cost of this scheme, but frankly I should have thought that the estimate of £7,000,000 a year was somewhat excessive, in view of the fact that most of the civil servants who would come into the scheme would be in the lower grades and would therefore be lower paid servants. I shall say no more on this occasion, but give a welcome to the Bill. I hope as much as the noble Lord, Lord Pakenham, that it will have a speedy passage to the Statute Book.

5.44 p.m.


My Lords, first may I declare my interest by notifying your Lordships that I am a member of the National Whitley Council for the Civil Service, responsible as one of the parties for the agreement on which this Bill is based. May I then 20 on to say that I welcome this Bill, as I welcomed the negotiations that led up to it. The Bill is another step in the improvement of Civil Service pension conditions for which many of us have agitated over a long period of time. It has taken us many years to get so far as we have to-day and we do not think we have got far enough. Since 1912 negotiations and agitation have been going on in the Civil Service, and to-day we obtain in this Bill a large measure of the things for which we have been agitating. I want to pay a tribute to my colleagues on the National Whitley Council, both on the staff side and on the official side, for their energetic work which led up to the agreement on which the Bill is based. I would pay tribute to the chairman of the Council, Mr. Albert Day, and would go on to name the responsible civil servants on the official side if it were not that, in accordance with tradition, they remain anonymous. But I would refer to the great care they have taken in studying all the problems, which has contributed to the production of this excellent measure. Nor would it be right for me to leave out the Ministers responsible, and I pay tribute to the care they have taken and the understanding and good humour they have shown at all stages.

The fact that I shall be bound to be critical does not in any way reduce the amount of praise I have for what we have in the Bill. That I venture to criticise three items which are either in the Bill in a lesser form or not in the Bill at all, is not a breach of understanding of the negotiations in respect of this measure, for the agreement provided that in respect of these items the staff organisations should have the right and opportunity of criticism. First, let me look at Parts I and II of the Bill. I think there is not one civil servant who will not welcome with open arms the fine conception that this gives to the Service. For a long period of years the absence of widows' pensions and provision for orphans and dependants was one of the constant problems of civil servants which they had been unable completely to solve for themselves, though they had solved this problem to some extent by means of benevolent funds and the like. The belief of so many members of the public that civil servants can rely on adequate pensions is one which those who have worked among civil servants know to be a dream. We were conscious of the fact that there were people retiring with pensions from 12s. to 20s. a week, whose only provision for death after their retirement on pension was an allocation to their widows, which they could make only if, after their retirement at sixty, their lives were declared to be good. The effect of this provision was to reduce the total amount of the small pension they had to an amount completely inadequate for their own needs. Their low pay did not allow them to save while they were working and they had no means of making provision. There will be many glad hearts when this scheme comes into force.

I should like to say a word about another provision, to which my noble friend Lord Pakenham did not refer but in respect of which there is great gratitude on the part of civil servants. Those broken down in health who have had to go sick with a pension (if they had over ten years' service and were therefore entitled to pension) of ten-eightieths, eleven-eightieths or twelve-eightieths of their salaries, have found themselves in dire need and have had to depend on benevolent societies or, as was often inevitable, on public assistance. We welcome the fact that it is now provided that no pension shall be based on a figure lower than twenty-eightieths of salary. I should like to thank the Government for this gesture in clearing up one of the civil servants' great difficulties. That is something for which I should like to thank the Government through my noble friend Lord Pakenham.

At this late hour I will not keep the House by developing in detail the three reserved matters. However, I want to refer to them in order to get them on record, because they are inevitably three matters about which Parliament is bound to hear again as a result of the agitation in the Civil Service. The first is that of added years. I refer only in passing to the references in the Report of the Committee presided over by my noble friend Lord Chorley, and with which the noble Lord who sits on the Liberal Benches, Lord Layton, was concerned, and the other Committee to which the Chorley Report referred—namely the Barlow Committee of 1944, which in paragraphs 43 and 44 of their Report made it clear that the Civil Service recruits certain of the professional classes at ages beyond the normal vet makes no allowance in respect of the late age of recruitment to provide compensation in pensionability, so that these people can therefore never hope to get a maximum amount of pension.

The second item of reservation in the agreement which was reached on the National Whitley Council was that of the extent of gratuities paid to temporary staffs on retirement. This, too, was the subject of discussion in another place, and I very much regret that the Government, although able to accept the reduction of the period of service from fourteen to seven years in order to earn a gratuity, have been unable to accept any suggestion increasing the inadequate amount of one week's pay for each year of service to some larger amount.

The problem of those persons is a good deal related to the general problem of the doctrine of unestablished employment to which my noble friend Lord Pakenham has referred. That is the centre point of the third reservation, the one which has caused the greatest amount of heart-burning and to which my noble friend Lord Munster referred—namely, the counting of unestablished service. Over a long period of years the Civil Service has suffered from the grievous doctrine that a man could work for forty years, for the first thirty of which he could be regarded as temporary because he was on I the unestablished roll, and only in his later years could he be regarded as established. Indeed, in respect of some grades—such grades as those of messenger—until recently it was only possible for one person in eight ever to be regarded as established; and he was a very fortunate man who managed to get a permanent post after less than twenty-five years' service in His Majesty's Civil Service. It is true that those exaggerated cases are now a thing of the past, but it still remains true that, even after this Bill is passed, all the temporary service that those people rendered in the past will not count for purposes of superannuation.

I would remind your Lordships that this subject has been one of constant agitation and constant giving way, bit by bit, by successive Governments, because, as has had to be admitted, they were conscious that there was no merit in the case which the Government of the day could put up against Civil Service claims. We had, first of all, the position in which no temporary service counted. Then, under the 1935 Act to which the noble Earl, Lord Munster, referred, we had half service to count for the future. Then, in 1946, mainly because of ex-Service men of the previous war to whom consideration was being given, half service was allowed to count from 1919. At least, we can congratulate the Government very sincerely on the statement which my noble friend Lord Pakenham has made to-day and which the Government announced in the other place recently, that hereafter this system is to come to an end and that once this Bill has become an Act all temporary staffs who become established will count the whole of their service for pension purposes. But I say to your Lordships, in all seriousness, that the very victory which those who have agitated have now won will but cause them considerable bitterness, because those who have agitated for the last thirty years see themselves securing victory and justice for posterity, but not for themselves. While it is a good thing for all of us to achieve something for posterity it is against human nature to think that we snail not complain when we find that we ourselves are left out. Parliament is the employer of these people, and because it is the employer Parliament is bound to hear more of this subject.

I fully appreciate that the Chancellor of the Exchequer must look at the finances of the country as a whole; that his responsibility is to Parliament in all matters, and not just in respect of the Civil Service or a Bill of this kind. I deeply regret, however, that he finds it necessary to admit that the principle which the Civil Service have submitted to Parliament as their employer is a sound one, but that, purely on the grounds of finance, it cannot be met. Although I have uttered these critical comments, it is not my intention on the next stage of this Bill to put down any Amendments whatsoever. I ask the Government to look at the points I have raised, and to bear them in mind in considering this matter. However, I would not take any step to hinder the passage of the Bill, because I know how much real value there is in the Bill and how badly it is needed. Every day we delay the Bill here, more men are dying who have no provision for their widows. They know that this Bill is before your Lordships' House, and they are hoping that its results will be attained in time.

There is one point in the statement made by the Chancellor of the Exchequer in another place and to which my noble friend Lord Pakenham referred—a statement which was further developed by the Chancellor when he said that for the future it was intended only to use unestablishment as a stage and not as a permanent method of employing people in the Civil Service. The Civil Service received the news of that statement with great gratitude. They have grown very tired of the assumption that everybody is temporary over a long period of time, and of the development of doctrine after doctrine which ignored recommendations of Committees and Royal Commissions on the subject. For instance, the Commission of 1929–31, presided over by the late Lord Tomlin, made a recommendation that no clerk in His Majesty's Civil Service should be regarded as temporary once he had served eighteen months. When I remind your Lordships that even before the last war began thousands of people were serving with many more than eighteen months' service—years' service, in fact—and to-day temporary staffs have many years' service, you will appreciate the feeling inside the Civil Service.

The Civil Service as a whole, and the National Whitley Council staff side in particular, are ready to grapple with this problem with the Chancellor of the Exchequer at once. It is a much larger problem than members of Parliament of both Houses normally realise. The truth is that, taking only temporary clerks, at the moment we have in excess of 120,000 who have up to about ten years' temporary service. We are busy establishing a number of these people by agreement, and the establishment agreements will operate over the next twelve months. If we allow for the run-down of contracting Departments and the establishment schemes which are now proceeding, we shall reach 1952 with not fewer than 50,000 temporary clerks held fairly permanently on the books of the Civil Service, many of whom by that time will have had thirteen years' service. It is the problem of that hard core of 50,000 with which the staff side of the Whitley Council, together with the Chancellor of the Exchequer and his representatives at the Treasury, must deal. The staff side is ready with a number of schemes and suggestions, and I am glad to note—as I am sure my noble friend will confirm—that negotiations are about to take place which may serve to implement the principles about which the Chancellor of the Exchequer spoke in his speech in another place.

Those of us who represent the Civil Service are grateful to the Government for this Bill, and we are grateful for the way in which all Parties, both in this House and in another place, have received this Bill. There was a great deal of satisfaction in the Service both at the speech which the right honourable gentleman the Financial Secretary to the Treasury made in presenting the Bill in another place and at the views he expressed in defence of the Service; and equal pleasure was given by the remarks of the right honourable gentleman who opened for the Opposition, Mr. Ralph Assheton. I think it is appropriate, when a Bill dealing with His Majesty's Civil Service comes before Parliament, that all Parties of the House should be agreed about the measure, and that all Parties should make their contribution. All three Parties in another place have said their piece about the Civil Service and have co-operated, both in Committee and on the Floor of the House, in tributes to the Service and in aiding the movement of this Bill as speedily as possible to your Lordships' House.

The Civil Service has been accustomed to a large number of kicks rather than to praise. I am afraid it meets the public in those places which hurt the public—in taxation, control and regulation, which are the lot of the Civil Service. They are hard-working people, despite the criticisms of red-nosed comedians. They are people who are not over-generously paid, and they are people who have not had the better conditions of employment extended to them. We are glad to see in this Bill overdue measures of reform introduced by the Government. I thank the Government for what they have done, and in the interests of those for whom it comes I wish the Bill a speedy passage to Royal Assent.

6.5 p.m.


My Lords, noble Lords who have spoken have expressed their gratitude to the Government for this Bill, and I, on my part, would return the compliment by expressing my gratitude to the two noble Lords who have spoken. They both adopted a responsible tone, and on any point where they differed from the Government they recognised the great difficulty in which the Chancellor of the Exchequer is placed. I do not think the House will wish me to go over all the ground yet again. I indicated in my opening statement the reasons which have actuated the Chancellor, and they have been set out at much greater length in discussions in another place. I will certainly make sure that my right honourable friend gives careful attention to what noble Lords have said, but I should be grossly misleading the House if I suggested at this stage that there was any likelihood of change. I will undertake to see that he fully appreciates what noble Lords have in mind.

I join with other noble Lords in yet another tribute to the Civil Service. I suppose if there are any people in the world who appreciate the help and self-sacrifice of the Civil Service, it is noble Lords who answer for many Departments from this Box. In our existence we deal with many different branches of the Civil Service, and often we are as clay in their hands. I myself appreciate all that they have done, and I am sure that other noble Lords on this Bench, as will other noble Lords who have been through the same experience, will agree. Let us therefore join once again in sending out a message of gratitude to the Civil Service, and I would once more thank noble Lords for the support they have given to this Bill.

On Question, Bill read 2a; and committed to a Committee of the Whole House.